If you have bad credit or no credit, you might not qualify for most credit card offers. In this case, you may need to consider using a prepaid credit card or a secured credit card as an alternative.

Secured credit cards were designed for people who need to repair their credit history or establish a credit history. Once you are approved, the secure credit card issuer requests a deposit which then becomes your credit limit – that is, you can only spend up to the total amount of your initial deposit, much like a bank account. When selecting a secured credit card, make sure that the card issuer reports to the major credit bureaus. Paying off your credit card balance on time will help you to improve your credit history.

Alternately, you could apply for a prepaid card. Prepaid credit cards can be used just as any other credit card and approval is guaranteed. Prepaid cards also require you to pre-deposit a balance. The disadvantage of prepaid credit cards is that they generally do not report your activity to credit bureaus, and thus you will not be able to improve (or diminish) your credit score.

Secured credit cards are credit cards for people with bad credit or no credit history. Secure credit cards are backed by a security deposit in order for the consumer to build or to rebuild their credit history. Typically, you can deposit anywhere from a couple of hundred to thousands of dollars into a security deposit and this amount will correspond to your credit line. For example, if you deposit $1000, your credit line will be $1,000.

Before applying for a secured credit card, you should find out what fees come with the card and whether the credit card issuer reports transactions to credit bureaus. If the issuer does not report your activity, the secured card will not help you build your credit history. Most secured credit cards carry an annual fee. Do NOT do not apply for any offers that list a 1-900 number as their contact. The FTC warns of reported scams in which companies advertise 1-900 numbers and consumers end up paying for placing calls to a company that never had any intention of giving out secured credit cards.

If you are not able to qualify for a secured credit card on your own, you can ask a trusted friend or a family member with good credit history to become your cosigner. Cosigners will be responsible for your debt in the event that you do not repay your balance. Once you get approved for a secured credit card, use the credit card responsibly. Keep track of your expenses and make sure you pay your bill on time. In a few months, check whether your credit history reflects your payment record. Eventually, when your credit record improves, you should be able to get a regular credit card with better terms.